ISLAMABAD, July 9: Investors of export processing zones (EPZs) have demanded of the government to allow project financing through local banks and development finance institutions (DFIs).

Well-placed sources told Dawn on Wednesday that in view of growing cost of the projects, the investors were finding it difficult to arrange entire investment out of their own foreign exchange resources.

At present under sub-rule 13(3) of EPZA rules 1981, industrial undertakings of the zone have been debarred from any credit facility out of Pakistan resources, including financing by Industrial Development Bank of Pakistan.

According to the relevant sub-rule, which is re-produced as — “no industrial undertaking in a zone shall be extended any credit facilities out of Pakistan resources, including financing by Industrial Development Bank of Pakistan.”

The investors have urged the government for consideration of the issue among others for boosting investment in EPZs in the upcoming trade policy 2003-04, the sources said.

The sources said that despite the fact that the facility of trading was allowed in the original concept of EPZ through an SRO1058 issued on September 23, 1981, but systematically denied by the Central Board of Revenue.

The investors have proposed to the government that warehousing and trading units of EPZs might be allowed to re-export all imported merchandise to Iran, Afghanistan, central Asian states besides other countries and re-export to tariff area of Pakistan on payment of duties and taxes apart from items on negative list namely — narcotics, alcoholic drinks, armaments, or those causing serious environmental pollution and live animals, automobiles, fish, meat and animal casings.

The investors also proposed to the government to allow the local entrepreneurs to invest in local currency on the same analogy. In order to provide facility the government should bring changes in export processing zones authority rules 1981.

It was also recommended that special funds might be allocated for acquisition of technology and improvement in various fields of design, engineering and manufacturing. It was also proposed that there should be no duties, surcharge or penalty on over-stayed goods in manufacturing bonds as per SRO822. The exporters should be allowed to carry over up to five per cent of their total exports for the last three years, the investors added.